Smart Powerr Corp.

For the second quarter ended June 30, 2015, sales of systems increased 29.2% to $24.48 million from $18.95 million. Gross profit was $3.11 million versus $4.56 million a year ago, and blended gross margin was 13% compared with 24%. Net income rose 71.2% to $11.28 million from $6.59 million, and diluted EPS was $0.40 versus $0.11. Operating expenses fell 27.6% to $0.55 million, while interest income on sales-type financial leases was $6.33 million, up 3.5% from $6.12 million. Cash and cash equivalents were $53.20 million, other current assets were $70.1 million, current liabilities were $19.84 million, and total shareholder equity was $223 million. Management did not provide formal next-quarter or full-year numerical guidance; instead, it said early project terminations could reduce gross momentum in lease income in coming quarters, while cash received from those terminations would support investment in new projects.

CEO Guohua Ku characterized the quarter as solid, saying the company increased both top line and bottom line. He emphasized continued demand for energy-saving and emission-reduction solutions, ongoing R&D, and exploration of new operating and revenue models. He also pointed to a supportive policy environment in China and said the company expects to pursue new projects for future growth.

CFO Jackie Shi walked through the quarter’s financial drivers: system sales of $24.48 million, contingent rental income of $0.1 million versus $2.1 million a year ago, gross margin of 13%, operating expenses of $0.55 million, and net income of $11.28 million. She noted the lower tax burden, with income tax expense down to $1.3 million and the effective tax rate at 10.4% versus 23.4% last year. On the balance sheet, she highlighted $53.20 million in cash and cash equivalents, $223 million in shareholder equity, and $428.98 million in total future minimum lease payments receivable.

There was no real analyst Q&A in the transcript; after management remarks, the operator moved to Q&A but no questions were asked. The main forward-looking management commentary was that two early lease terminations would likely weigh on gross momentum from sales-type leases in coming quarters, though the cash received would be used to fund new projects. Management also reiterated that policy support for environmental and energy-recycling projects remains favorable.